CAC 40 index continues to trade in a bull market. Here are the next targets

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Apr 24, 2021
  • CAC 40 index closed the week above 6,250 points
  • 6,000 points represent a strong support level
  • France Prime Minister Jean Castex said that the peak of the third wave in France is behind us

CAC 40 index closed the week above 6,250 points, and as long the CAC 40 is above 6,000 support, there is no risk of the positive trend reversal. Concerns over the pace of vaccination campaigns in France still represent an issue, but despite this, the policymakers believe that they will be able to lift some of the restrictions in the upcoming weeks.

France is currently under its third lockdown; shops, cafes, restaurants are closed while the business owners in these sectors are piling pressure on the government for reopenings after months of closure. The government could allow reopenings on a regional basis, but this will depend on Covid-19 incidence rates.

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More than a hundred thousand people have died in France from Covid-19, and Health Minister Olivier Véran said that France would begin offering the Johnson & Johnson vaccine. France Prime Minister Jean Castex said that the peak of the third wave in France is behind us, and travel restrictions will be relaxed from May.

“There had been a “genuine fall in the circulation of the virus over the last ten days”, confirming that schools will reopen on Monday and restrictions confining people to a 10-kilometer (six-mile) radius of their homes would be dropped from May 3,” Prime Minister Jean Castex said on Thursday.

The EU has vaccinated less than 14% of the population, and economic sentiment contracted as another coronavirus wave weighed on local businesses. The global battle against the coronavirus continues, but it seems that the worst has been avoided, and all industry sectors should benefit from the economic recovery.

The European Central Bank had a monetary policy meeting last week, and the bank left monetary policy unchanged; still, European policymakers acknowledged signs of economic improvement. The European Central Bank will continue with fiscal stimulus until the economy fully recovers, while Christine Lagarde said that ECB would continue buying bonds at a faster pace.

Consumer confidence in the EU improved in April which suggests that the EU is heading in the right direction.

Technical analysis: 6,000 points represent strong support level

Data source: tradingview.com

CAC 40 index continues to trade in a buy zone, and if the price above 6,300 points, the next target could be around 6,400 or even 6,500 points. On the other side, if the price falls below 6,000 points, it would be a firm “sell” signal, and the next target could be around 5,500 points.

Summary

CAC 40 index continues to trade in a buy zone, but if the price of this index falls below 6,000 points, the next target could be around 5,500 points. France is currently under its third lockdown, but France Prime Minister Jean Castex said that the peak of the third wave in France is behind us.

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